Having a background in sociology, philosophy, and economics, I'm going to try to give this blog a pretty broad scope. Going from finance and economics, to geopolitics and world news, to the occasional academic or theoretical post.
I was born in Buenos Aires, Argentina and live in New York, so we'll try to add that into it as well.
Even though I like Adam Smith, don't be surprised if a little Marx makes its way in there as well.
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UPDATE (2:43 p.m.): An ISDA spokesman told Forbes no decision has been reached regarding on whether Greece’s restructuring qualifies as a credit event, which would in turn trigger CDS protection.

A report by Derivatives Intelligence published around 2:00 PM New York time said the ISDA had indeed considered the PSI/debt restructuring deal a credit event. Their report from the supposed ISDA release, noting the application of collective action clauses had “reduced” bondholders’ ability to receive payments, and that an auction for outstanding CDS would be held March 19.

Kevin Dugan, the journalist who published the initial report, tweeted a picture of the ISDA’s supposed press release. Click here for the picture.

Greece did it! The Hellenic Republic executed the highly controversial PSI or debt restructuring deal, getting 85.8% of holders of Greek-law governed bonds and 69% of foreign-law bonds to tender. All eyes will now fall on the ISDA as the Greek government uses collective action clauses (CACs) to force holders of bonds governed by domestic law to take the debt swap, potentially triggering credit default swaps (CDS).

While Greece hasn’t missed a bond payment yet, it has effectively defaulted by forcing a 74% haircut on those creditors that held out, as Fitch’s calculations in their recent downgrade of Greece’s sovereign rating to “selective default” show. The question of a Greek default may appear superfluous to some, given the country is relatively small and has been bailed out, but the resolution of the situation will set historical precedents that could take on massive importance if other peripherals, particularly Spain and Italy, face serious financing problems.

And that is why the International Swaps and Derivatives Association’s decision on CDS is actually transcendental. Greece announced that holders of €152 billion of bonds governed by Greek law, of the approximately €177 billion issued, voluntarily tendered their bonds and accepted a 74% haircut. Also included in the deal were holders of laws governed by foreign law, generally British or Japanese, whom tendered €20 billion or 69% of bonds outstanding.

Using retroactively inserted CACs, Greece can force bondholders governed by domestic law to take the deal, as long as they meet a certain threshold, which they did: beyond the 85.8% of those bondholders that tendered their bonds, an additional 5.3% (about €9.38 billion in face value) voted to force the restructuring terms, without tendering their bonds. Presumably, that 5.3% consists of bondholders that bought CDS protection, and need the CAC implementation to trigger that protection.

At the end of the day, this means Greece is forcing 9.9% of bondholders under domestic law to both accept the retroactively inserted CACs and to take a 74% haircut (according to Fitch’s calculations). Just to clarify, an additional 5.3% held out but voted to enforce the CACs, presumably because they bought CDS to cash-in on Greece’s sovereign debt crisis.

It’s all down to the ISDA now. The group has been under fire by the media for failing to consider Greece in default when it was clearly imposing a massive haircut on its creditors. To the ISDA’s defense, no bondholder had actually suffered a haircut. As of Monday, when Greece implements the swap, this will have occurred, against the will of 9.9% of those bondholders.

The ISDA was set to meet at 1PM London time on Friday to figure out if a restructuring credit event had occurred, a circumstance that would trigger CDS. Both Nomura and Barclays have come out expecting the ISDA to rule in favor of a credit event, thus triggering CDS protection.

The net notional value of CDS outstanding is relatively small, around $3.2 billion. Barclays’ analysts considered the process to be “relatively uneventful” given how small the actual liabilities are. But they are missing the point. As the ISDA has made clear in the past, these products are in their infancy and are in a process of evolution. The Greek restructuring is a defining moment for CDS and other derivative products, giving the ISDA’s decision value in terms of precedence, much like a in a legal system based on jurisprudence. The net notional value of total CDS outstanding is $15.7 trillion according to DTCC, that’s larger than the U.S. economy.

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Where exactly do you account for German obstructionism, minimalism and incrementalism?

You say, Greece has defaulted. But we all know Germany has caused her to default. How else to you account for this PSI German inspired nonsense which might as well stand for Possibly Stupidest Idea ever? The very idea of the PSI undermines the same financial system it claims to support! Gone is the trust necessary for financial markets to function thanks to Frau Ignoramus.

BTW, how do you account for the fact that Germany is at odds with everybody of consequence? Germany is delinquent in her ESM funding obligations, Germany is at odds with the ECB and Germany is in a spitting contest with the IMF.

Is it so hard here to see tactics 101? Isn’t a well known tactic to ascribe to your adversary that what is you own problem to begin with?

The idea of Germany as a European leader has defaulted here. Not Greece. Greece’s case is that of financial rape.

Yes, Germany has orchestrated the Greek default, PSI, and bailouts. It hasn’t been at odds with the ECB because it controls it. It has only faced the resistance of the French, apparently the only European nation with some sort of say (when it comes to going against something, anything, that Germany wants), which has been minimal and on just a few issues.

As you know well, I believe that both Germans and Greeks (along with other peripherals and other core nations) are to blame for the failure of the Economic Monetary Union. Inherent imbalances were supported by both surplus and deficit countries.

Having the gold, in this gee-financially connected world, is akin to having the guns, unfortunately, to the expense of populations. It happened to Argentina (when foreign creditors held the country hostage) and it happens in Argentina (with the current government closing off imports and putting capital controls so USD don’t flow out of the country, while forcing 20-5% inflation on the population via bad policymaking).

You are seeing the same thing in Europe and Greece is the current victim, but don’t forget, Greece also helped perpetuate its situation, with policymakers hiding problems under the rug and the population enjoying the benefits. Alas, the Germans didn’t care because peripheral nations kept on buying German products (cars). Now they stand on their moral pedestal, but Germany is to blame (as are the peripherals) for the current situation.